A similar problem existed with Sherlock Holmes Nemesis and Physx drivers. You can read about it here. They suggest downloading the latest drivers which provide the capability to remove the drivers and there's also a link to older drivers version 9.09.1112. These drivers worked for me, but I did uninstall the existing one before installing the 9.09.1112. I don't remember how the first driver was listed, but the 9.09.1112 version is listed under NVIDIA PhysX in Programs and Features (Win 7's version of Add/Remove Programs).

Thank you Uncle Reg. I used the second download link and I didn't uninstall anything.. and now the game works! I'm playing it already. Why don't they put that driver in with the download? anyway, thanks everyone for the help! the game's afoot.

Great! Glad it worked. Keep in mind that if you ever install newer Nvidia drivers, then the Physx drivers might be updated also; but with the age of your graphics card, installing new drivers is probably not a good idea.